NOTE
Fiscal Policy
English translation of the original VNote “Fiscal Policy”, preserving its structure with only necessary small corrections.
This is a historical learning note and may contain outdated or incomplete understanding.
Note: This preserves the original VNote structure and wording as much as possible. Only clear errors or statistical/institutional definitions that have changed are corrected.
1. What Is Fiscal Policy?
Policies through which the government uses taxes, government spending, transfer payments, and public debt to influence aggregate demand, income distribution, and economic activity.
2. Classification of Fiscal Policy
2.1. Government Revenue
2.1.1. Tools
2.1.1.1. Taxes
Compulsory and non-reciprocal.
2.1.1.2. Public Debt
Raising funds backed by government credit.
2.2. Government Expenditure
2.2.1. Tools
2.2.1.1. Government Purchases
Government purchases of goods and services, such as military supplies, office supplies, compensation of government employees, and public works.
2.2.1.2. Government Transfer Payments
Government spending on social welfare insurance, poverty relief, subsidies, and similar programs. Transfer payments are not counted directly in GDP because they redistribute income among members of society rather than purchasing newly produced goods or services.